CORNERSTONE
RECEIVERSHIP:GENERAL INFORMATION

This page was last updated
on August 31, 2000

On
November 24, 1999, the United States Securities and Exchange Commission
("SEC") filed a lawsuit against Cornerstone Prodigy
Group, Inc., Gary Reeder and Sandra Reeder in which they were accused
of violating various securities laws by operating, among other things,
an illegal Ponzi scheme. The lawsuit was assigned Civil Action No. 499-CV-0978-Y,
and is pending in the United States District Court for the Northern District
of Texas, Fort Worth Division. The judge presiding over the case is Federal
District Judge Terry R. Means. All papers which are filed in the case
are submitted through the United States District Clerk's Office, whose
address is 501 W. 10th St., Room 202, Fort Worth, TX 76102-3643.

In
the order freezing the assets, the Court set an expedited hearing on December
10, 1999, to allow Cornerstone and the Reeders to come before the Court,
tell their side of the story and present evidence. At the time of the
hearing scheduled on December 10, 1999, the Reeders, through their lawyers,
met with the SEC, the Receiver and Judge Means to discuss reaching an
agreement. As a result of that discussion, an agreement acceptable to
the SEC, the Receiver, the Reeders and their lawyers was reached and no
actual hearing was conducted in the courtroom. Instead, the agreement
was reduced to writing in the form of an Agreed Preliminary
Injunction which was then signed by Judge Means.

The
order appointing the Receiver required him to make a preliminary
report to the Court of the assets and liabilities of Cornerstone and
the Reeders by December 25, 1999. By agreement with the Reeders, the deadline
was extended until January 14, 2000.

On
January 21, 2000, the Receiver sent a letter
to all known Cornerstone investors. On March 21, 2000, the Receiver sent
a second letter to all investors
along with a claim form to be completed and returned to the Receiver.

Since
his appointment, the Receiver has taken possession of all known assets
and has liquidated them to cash. All of the assets which have been liquidated
have occurred only after the Court entered an order allowing the Receiver
to do so. The amount of money obtained by the Receiver from the sale of
the assets can be found on our Current
Status page. In
addition, the Receiver has paid all outstanding legitimate bills of Cornerstone
and the Reeders.

On
February 29, 2000 and March 3, 2000, the Reeders, the SEC and the Receiver
reached a settlement of all claims between them, which is embodied in
a written document called a Stipulation and Consent.
The Court approved the settlement on April 14, 2000, and entered its Final
Judgment against the Reeders.

On August
23, 2000, the Receiver filed his Final
Report and Proposed Distribution which contained a complete
detailed report on all monies collected and spent by the Receiver. After
a Hearing held on August 25, 2000, the Court issued its order approving
Final Report and Proposed Distribution. Thereafter, when the Receiver
began preparing checks to mail to investors, he discovered four minor
errors which he brought to the attention of the Court. Accordingly, on
August 29, 2000, the Court issued its Order amending
the August 25, 2000 Order Approving Final Report and Proposed Distribution.
Exhibit A
to the Order sets forth the amount of each check (final distribution)
which will be sent to each investor.

These
checks are in the process of being issued and mailed NOW.
If your name is on Exhibit A, you should
receive your check within a couple of days. Please be sure to cash the
check promptly because it will be void after 60 days. YOU
WILL NOT RECEIVE ANY MORE MONEY FROM THE RECEIVER OR THE COURT.

*
Copies of documents referenced in this page can be read by clicking on
the hyperlink within the text or on the document list below.

UPDATE ALERT

THE
RECEIVER'S FINAL REPORT AND PROPOSED DISTRIBUTION
AS WELL AS THE COURT'S ORDER REGARDING IT ARE AVAILABLE FOR
VIEWING BY CLICKING ON THE LINK BELOW

VIEW
COPIES OF IMPORTANT COURT DOCUMENTS

Note:
In order to read the following PDF documents, you must have Adobe Acrobat
Reader, which is available for free, through shareware. Click below to
download: